Six Chicago-area malls just landed on a watch list no property owner wants to see. A new batch of grades for regional shopping centers flags them as vulnerable to a so-called “death loop,” a slow, self-feeding decline in which losing anchor stores leads to weaker foot traffic and rising vacancies, which then makes each year harder to turn around. With lenders, owners, and suburban officials now weighing whether to double down, sell or radically rethink these properties, the next 12 to 18 months could shape the retail map in several local communities.
What the grades measure
Green Street Advisors evaluates regional and super-regional malls on tenant mix, sales per square foot, traffic trends and capital needs, then rolls that into a market-grade that investors use as a shorthand for long-term staying power. According to Green Street Advisors, malls with weaker grades account for a disproportionate share of the sector’s downside risk and typically require heavier reinvestment just to remain competitive.
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